Which Bankruptcy Chapter is Best for Me?

Which Bankruptcy Chapter is Best for Me?

Each financial situation varies from household to household. If you’ve accumulated more debt than you’re able to pay, and debt consolidation doesn’t fit your budget, Chapter 7 bankruptcy might be right for you. Before filing under this chapter, however, you must take the Means Test. This will determine whether your income meets, exceeds or falls well short of your debts.

Before retaining an Arizona bankruptcy attorney, ask yourself these questions to determine if you’re making a wise choice. Remember, you can only file one petition every eight (8) years from your last file date (not discharge date).

Will I need to apply for credit soon?

People who anticipate purchasing homes, automobiles or other major items may wonder what impact bankruptcy will have on their ability to get approved. A much larger issue may loom over potential filers, which could actually prevent discharges from eliminating all debts.

If debtors make any “luxury” purchase over $650 dollars within 90 days of filing Chapter 7 bankruptcy, the creditor can use the presumption of fraud to prevent that money from being wrote off. Likewise, if an individual filer receives $950 or more in cash advances within 70 days of filing, the same presumption exists. Creditors can make this presumption without providing evidence, at least initially.

Anticipate using credit cards for major purchases? Think you’ll need to purchase new roofing, vehicles or something deemed “luxurious” in the near future? If so, filing bankruptcy immediately after said purchase could not only have implications on your discharge, it may seem criminal.

Can I afford to hire an attorney?

Now, hiring an Arizona bankruptcy attorney isn’t mandatory, but considering the intimidation many feel when standing before a U.S. Bankruptcy Court judge and potential creditors, why battle without an attorney? With filing fee, simple Chapter 7 bankruptcies are relatively affordable. The alternative is going alone, paying the filing fee, and walking into your 341 Meeting with nothing but your debts.

Some attorneys will allow a certain percentage (plus filing fee) to be paid, with the remaining balance before discharge. Point being, if you’re unable to hire an attorney to assist in making this filing go smoothly, you should reconsider your options unless you’re 100% certain you know how to approach creditors in court.

Do I owe enough to file?

Owing several doctor bills that add up to under $1,000 isn’t cause for alarm. Many hospitals will work out payment plans to make sure you’re not indebted for too long. Knowing this, Chapter 7 bankruptcy would probably waste time, resources and harm your credit report unnecessarily.

Now, if tens of thousands worth of medical, credit card, personal loan and civil judgment debts have weighed you down, you’re an excellent candidate for bankruptcy since your credit reports are trashed, anyway.

In an era where debt not only is expected but is inevitable, excessive liabilities with little income to meet those priorities often signals the need to start anew.

How to file bankruptcy in Arizona

Once you’ve piled your unpayable bills and jotted down creditor names, addresses and phone numbers, you’ll want to head to your attorney’s office. You will fill out what seems to be a short novel depicting your debts, your income, if you intend to reaffirm any debts, and then you’ll turn your paperwork in (probably to the paralegal or legal secretary), get an appointment scheduled, and away you go.

Not sure how to claim bankruptcy in Arizona? There’s a Means Test for that, which your attorney will go over.

Unsure if you meet all requirements to file Bankruptcy in Arizona? Still aren’t convinced whether bankruptcy is right for you, or need help picking the right chapter? Retain a bankruptcy attorney, and you’ll be amazed how simple it really is. Click here for additional information on Chapter 7 bankruptcy in Arizona.

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